Blue Ocean Medical Center

Part three in the series of our famed fictional hospital as it tries on alternatives to the status quo in healthcare. Let it continue to inspire you to think and act a bit differently and engage with me to find a greater truth. For the extended introduction and parts one and two (‘Hospital without a Home’ and ‘Cells instead of Structures’), please follow this link. Still to come in the weeks ahead: When Prediction meets Precision, Evidence Based Only Please and the Ultimate Medical Mall.

Introduction

The mirrored-window facade of Blue Ocean Medical Center, or Blue Ocean Med, only just catches the watery October sun as it sinks below the city skyline. Situated between the edge of a mid-size city and the Atlantic Ocean, Blue Ocean Med is a hub for regional healthcare. The hospital aims to serve the regional community on all relevant aspects of specialist care, offering all regular diagnostics and surgical interventions as well as prevention programs, radiotherapy, e-health and research and development. A truly wonderful organization and a wholly unremarkable general hospital. It is actually almost identical in organization, size and offering to both of the two nearest general hospitals. These also deliver, in about equal measure:

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  1. Extensive high-tech facilities
  2. A comprehensive care offering
  3. Fee-for-service
  4. E-health
  5. Qualified and caring personnel
  6. R&D and cutting edge medicine

Blue Ocean Med, like all general hospitals, is struggling with issues of quality, cost and profile. In order to stand out, they know they must make some fundamental changes. But how? What can they do differently with real impact? Can they afford to? And how can they do this without doing the exact same things everybody else is doing?

BOM Two: Cells instead of Structures

Another rainy day on the coast with a sky as uniformly grey as the strategic promise of a general hospital. Blue Ocean Medical Center is  painfully aware that they, like all general hospitals the world over, basically promise that no matter what the ailment or complaint; they’ll soon find out what it is, treat it quickly and effectively with the latest in medicine and technology wielded by caring and competent staff. This concept gets in the way of delivering the promised ready-access to high quality and affordable care.  You see; in order to deliver ‘anything for anyone’ Blue Ocean Med must combine a vast array of capabilities. These include many different medical specialists, facilities and technologies. All these capabilities come with different processes, schedules, operating margins, regulations and even business models. All of this needs to work seamlessly together in a slightly different way each time someone comes through the shiny double revolving doors. Not only is this extremely ambitious and fault-prone (the organization, not the revolving doors), it also diverts attention from professionals and patients to figuring it all out and somehow making it work.

Damned complexity

Organizational complexity is a major factor in things going wrong, resilience to change and burn-out of (healthcare) professionals. It seems very efficient to have all this expert knowledge, departments and facilities organized in a single body. Unfortunately this concentration of capabilities also exponentially increases organizational complexity, outstripping the capability to effectively manage it all. As the law of requisite variety states: in order to deal properly with the diversity of problems the world throws at you, you need to have a repertoire of responses which is (at least) as nuanced as the problems you face. This repertoire of responses is not only pretty limited considering the number of states to control, it also costs tons of coordination, task division, reporting, registrations, accounting, ict, coffee machines and parking lots.  The CEO also realized that none of these are on his shopping list should a congenital heart failure catch up with him.

Why focus is not the answer

The best known alternative to the general hospital is a focused clinic. These clinics are far less complex and regularly outperform general hospitals on both quality and costs. But they also have a downside. Human beings are not a set of organs held up by bone and skin. A body works as an integrated organic whole. Therefore patients are likely to need more than a single specialism when seriously ill. And with the increase of chronic disease and comorbidity through the ageing of the population, we need more professionals to be working together in more multidisciplinary teams. Are such things not easiest organized within a single healthcare system? Besides, the complexity and interconnectedness of general hospitals are the main reasons why general hospitals cannot and will not make meaningful portfolio choices. They cannot fully foresee the consequences to the plate of spaghetti if they start pulling strings out. They are more or less cemented to their comprehensive care offering.

Organism instead of organization

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Blue Ocean Med’s CEO realized he was long past the point where he could effectively manage the complexity of Blue Ocean Med when yet another improvement programme failed. It all started out brilliantly, but trouble started when the words ‘budget’, ‘governance’ or ‘ownership’ came to the table. They always do. He was painfully reminded that he actually does not run a single organization. He heads a federalized union of semi-independent sub-organizations, like most general hospitals. He also realized that because these units are relatively small and focused, they reduce some of the complexity and overhead for their members, but not for the whole. But more focus means better results. Lower overhead and interference means greater sense of entrepreneurship. That is why performance and change within the boundaries of a unit is usually good. Things go south when two or more units/departments/divisions need to work together. Even when working in those multidisciplinary teams we need so badly.  He remembered reading a book called ‘Eckart’s Notes’. In it, Eckart Wintzen, founder and CEO of BSO/Origin, describes how he used to split-up any organizational unit exceeding 30 members. Eckart goes on to describe how each unit was expected to function independently from a central organization. These small units did almost everything themselves, within company boundaries. Personnel, office-equipment, leasing cars. These small units act like cells in a living organism. Each cell interconnected to form a whole, but seemingly functioning independently. Governed only by the company’s DNA, not some totalitarian central organ.

Within BSO/Origin this set-up maximized agility and entrepreneurship of each unit, while reducing central HQ to a bare minimum. So why could this not work in his hospital? Never afraid to take a different tack, Blue Ocean Med started to de-compose itself into these very small independent units or cells. These are preferably not organized around medical specializations, rather on client-centred propositions. They started out with units focusing on organ specific care, disease specific diagnosis, patient-group research, technology development: you name it. As long as there is a clear value proposition, target group and a viable business model, it is a go. Because of their focus and very small size, everyone soon found that they absolutely needed other cells in order to function. That helped things move along nicely on the cooperation front. They also found they could not decentralize everything of the central HQ. The Blue Ocean Med central organization needs to offer some support in matters of compliance, knowledge transfer, ICT and finance. It also supports initiative and cooperation by providing a safe internal environment for budding initiatives and innovation.

Small rules Big

Without centralizing structures getting in the way or to hide behind, each cell needs to actively work together and show vitality. Entrepreneurship, ownership and local responsibility also makes cells look for superior offerings both inside as outside the organization. That meant that Blue Ocean Med lost some non-viable units and functions to the market. They did not choose to, but things sorted themselves out. The end-result is a focused general hospital based on healthy cells, interconnected both inside and outside the organization, with minimal central rule. The market and network doing the pruning of unviable functions, combinations and cells. A truly vital organism. Most general hospitals however are turning to growth through mergers, geographical expansion, broadening of portfolios and innovation. All of these adding complexity, increasing cost and further outstretching the already limited grasp on running things smoothly. Blue Ocean Med’s energy is aimed at actually improving health the way they know best instead of managing ever increasing and redundant complexity.

IG&H

Author IG&H

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